Midterm Election Outcome No Reason to Get Complacent

An Ad Age Editorial

Published on November 08, 2010.

With the Republicans taking control of the House last week, the more business-minded readers of Ad Age may be thinking that we'll be sailing clear regulatory seas for at least the next couple of years.

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Republicans are pro-business, right? And even if the House can't ram anything through the Senate or get legislation across President Barack Obama's desk, gridlock means there will be no new regulations that meddle with the day-to-day operations of the marketing, advertising and media industries.

Don't be so sure.

Industry watchers from the American Association of Advertising Agencies and the Association of National Advertisers point out that there are a few things to worry about with the next Congress.

The first is unpredictability. Many of the Democrats left standing were not those from moderate areas. Instead, they were those from the bluest of blue districts. No one knows yet how they'll react to the new reality. Even less is known about how the few remaining moderate Democrats will behave.

And while Republicans are typically seen as pro-business, there are many first-timers in this new class and they—and a number of the veterans—owe their seats in part to the tea party. And while the tea party was very supportive of small businesses, one of its key flashpoints was the bailout of big businesses as well as "corporate welfare"—i.e., tax cuts lavished on major corporations at the expense of smaller ones.

Consider, too, that the Republicans see their top priority as closing the budget gap. One way to do that is to close tax loopholes and get rid of deductions. Even if they can't do it on a national level, look for state governments to consider the option.

Finally, while gridlock may be the friend of Wall Street, it may turn out to be an enemy for the industries we cover. As we've said before, when Congress can't get major bills passed or is sliding even lower in voter-favorability polls, it tends to look for common ground. We can think of a few useful villains in our sector: marketing to children; the obesity epidemic "caused" by fast food and fast-food advertising; pharmaceutical advertising; cable monopolies; and, of course, internet privacy and behavioral targeting.

These things might not be on anyone's radar now, but perhaps we should all be prepared.